Stelrad Lifts Profit Quality and Cash Flow Despite Softer 2025 Revenue

Stelrad (LSE:SRAD) reported a 3.8% decline in revenue to £279.6 million for 2025 as demand remained subdued across the UK, Ireland and Europe. Despite the softer top line, adjusted operating profit rose 3% to £32.5 million, with margins improving thanks to a favourable product mix and ongoing cost efficiencies. Statutory profit dropped significantly due to a £14.9 million impairment and restructuring charges, but free cash flow more than doubled, leverage declined and the board increased the dividend, reflecting confidence in the group’s financial position even as market conditions remain challenging in the near term.

The company expects operational optimisation and restructuring initiatives across its manufacturing network—along with the exit from certain loss-making contracts—to support further margin improvement and position the business for stronger performance when demand recovers. Stelrad also continued to shift its portfolio toward higher-margin and decarbonisation-focused products, achieving a record share of premium steel panel radiators and delivering solid growth in high-output, hybrid and electric ranges. These developments strengthen the group’s positioning to benefit from long-term heating transition trends, although demand is anticipated to remain soft through the first half of 2026.

The outlook for Stelrad Group Plc reflects solid operational and financial progress alongside positive corporate developments, although technical indicators remain bearish and the company trades on a relatively elevated price-to-earnings multiple. Strong cost control and improved cash generation are key strengths, while current market momentum and valuation pressures present potential headwinds.

More about Stelrad Group Plc

Stelrad Group plc is a leading European manufacturer of radiators, supplying hydronic, hybrid, dual-fuel and electric heating solutions to more than 500 customers across over 40 countries. Its product range includes standard and premium steel panel radiators, towel warmers and decorative designs sold under brands such as Stelrad, Henrad, Termo Teknik, DL Radiators and Hudevad. The company holds leading market positions in six European countries.